-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O8+gciD2GiqoPN+qr8TMp8whvcKGJAeM63uw9ISy2qdbaPjHWMwVvicn/7G9HOQa XFytXUwS3Me4C8y6tN6kTw== 0000033015-99-000010.txt : 19990630 0000033015-99-000010.hdr.sgml : 19990630 ACCESSION NUMBER: 0000033015-99-000010 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEXAS UTILITIES CO /TX/ CENTRAL INDEX KEY: 0001023291 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 752669310 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-12833 FILM NUMBER: 99655697 BUSINESS ADDRESS: STREET 1: ENERGY PLAZA STREET 2: 1601 BRYAN ST CITY: DALLAS STATE: TX ZIP: 75201 BUSINESS PHONE: 2148124600 MAIL ADDRESS: STREET 1: TEXAS UTILITIES CO STREET 2: 1601 BRYAN STREET CITY: DALLAS STATE: TX ZIP: 75201 FORMER COMPANY: FORMER CONFORMED NAME: TUC HOLDING CO DATE OF NAME CHANGE: 19960919 11-K 1 ENSAVE PLAN ============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------- FORM 11-K [ x ] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN Commission File No. 1-3183 ---------------------------- TXU GAS COMPANY (Formerly, ENSERCH Corporation) Energy Plaza, 1601 Bryan Street, Dallas, Texas 75201 (Name of issuer of the securities held pursuant to the Plan and the address of its principal executive office) ============================================================================== TABLE OF CONTENTS Page FINANCIAL STATEMENTS The following statements are furnished for the Plan: Statements of Net Assets Available for Benefits December 31, 1998 and 1997....................................... 1 Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 1998............................. 2 Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 1997............................. 3 Notes to Financial Statements...................................... 4 Supplemental Schedules: Schedule of Assets Held for Investment Purposes, December 31, 1998.............................................. 9 Schedule of Reportable Transactions for the Year Ended December 31, 1998........................................ 10 INDEPENDENT AUDITORS' REPORT.......................................... 11 SIGNATURE............................................................. 12 EXHIBITS The following exhibit is filed herewith: Independent Auditors' Consent...................................... 13
ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS December 31, ----------------- ASSETS 1998 1997 ---- ---- Cash and Short-term Investments............................ $ 281,504 $ 246,862 Investments - at fair value: Enserch Exploration, Inc. (EEX) Common Stock Fund...................................... 3,686,634 18,025,953 TXU Common Stock Fund.................................... 17,871,713 14,143,574 Mutual Funds: American AAdvantage International Institutional........ 62,359 -- Dreyfus-Certus Stable Value............................ 4,040,769 -- Fidelity Equity-Income................................. 5,566,765 4,869,649 Hotchkis & Wiley Balanced.............................. 11,343,974 -- IDS New Dimensions Y-Class............................. 12,668,470 -- SSgA Small Capitalization.............................. 80,083 -- Vanguard Bond Index Total Institutional................ 2,588,560 -- Vanguard Institutional Index .......................... 8,115,432 -- Fidelity Magellan...................................... -- 10,716,846 Fidelity Puritan....................................... -- 12,338,473 Fidelity Spartan U.S. Equity Index..................... -- 5,359,302 Fidelity U.S. Bond Index............................... -- 2,277,711 Fidelity Retirement Government Money Market Portfolio.. -- 4,592,773 Participant loans receivable............................. 988,776 777,489 ---------- ----------- Total investments..................................... 67,013,535 73,101,770 Receivables: Dividends and interest................................... 7,704 7,638 ---------- ----------- Total assets.......................................... 67,302,743 73,356,270 ---------- ----------- LIABILITIES - ----------- Administrative expense payable............................. -- 61,002 ---------- ----------- NET ASSETS AVAILABLE FOR BENEFITS.......................... $67,302,743 $73,295,268 =========== =========== See accompanying Notes to Financial Statements.
1
ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1998 SUPPLEMENTAL INFORMATION ---------------------------------------------------------------------- MUTUAL FUNDS ----------------------------------------- EEX TXU American Common Common AAdvantage Fidelity Stock Stock International Dreyfus-Certus Equity- Total Fund Fund Institutional Stable Value Income ------- ------ ------ ------------- -------------- -------- NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR. . . . . . . . . . . $73,295,268 $18,025,953 $14,143,574 $ -- $ -- $4,869,649 ----------- ----------- ----------- ----------- ---------- ----------- ADDITIONS: Investment Income- Interest and dividends. . . . . . . 3,273,524 -- 747,964 2,925 56,627 249,444 ----------- ----------- ----------- ----------- ---------- ----------- Contributions: Participants' payroll deductions. . 4,785,347 -- 728,408 2,810 99,742 490,066 Participants' rollover transfers. . 32,321 -- 3,884 -- -- 5,826 Employer's matching contributions . 1,678,927 -- 1,678,911 -- -- -- ----------- ----------- ----------- ----------- ---------- ----------- Total contributions . . . . . . 6,496,595 -- 2,411,203 2,810 99,742 495,892 ----------- ----------- ----------- ----------- ---------- ----------- Net unrealized and realized appreciation (depreciation) in fair value of investments . . . . . (6,144,968) (11,239,674) 1,819,285 1,465 -- 393,327 ----------- ----------- ----------- ----------- ---------- ----------- Total additions. . . . . . . . . . . 3,625,151 (11,239,674) 4,978,452 7,200 156,369 1,138,663 ----------- ----------- ----------- ----------- ---------- ----------- DEDUCTIONS: Distributions to withdrawing participants (9,721,651) (2,038,651) (1,794,768) -- (532,785) (529,148) Administrative expenses. . . . . . . . (20,831) (8,259) -- (1) (468) (1,154) ----------- ----------- ----------- ----------- ---------- ----------- Total deductions . . . . . . . . . . (9,742,482) (2,046,910) (1,794,768) (1) (533,253) (530,302) ----------- ----------- ----------- ----------- ---------- ----------- TRANSFERS BETWEEN FUNDS - Net . . . . . . -- (1,018,492) 569,286 54,841 4,416,670 119,003 ----------- ----------- ----------- ----------- ---------- ----------- OTHER ACTIVITY. . . . . . . . . . . . . . 124,806 (34,243) (24,831) 319 983 (30,248) ----------- ----------- ----------- ----------- ---------- ----------- Net additions (deductions) . . . . . (5,992,525) (14,339,319) 3,728,139 62,359 4,040,769 697,116 ----------- ----------- ----------- ----------- ---------- ----------- NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR. . . . . . . . . . . . . . $67,302,743 $ 3,686,634 $17,871,713 $ 62,359 $4,040,769 $5,566,765 =========== =========== =========== =========== ========== ===========
Fidelity Fidelity Retirement Spartan Fidelity Government Hotchkis Fidelity Fidelity U.S. Equity US Bond Money Market & Wiley Magellan Puritan Index Index Portfolio Balanced -------- ------- --------- ------- ----------- -------- NET ASSETS AVAILABLE, FOR BENEFITS, BEGINNING OF YEAR. . . . . . . . . . . $10,716,846 $12,338,473 $ 5,359,302 $ 2,277,711 $4,592,773 $ -- ----------- ----------- ----------- ----------- ---------- ----------- ADDITIONS: Investment Income- Interest and dividends. . . . . . . 21,725 203,240 99,724 113,445 151,581 702,279 ----------- ----------- ----------- ----------- ---------- ----------- Contributions: Participants' payroll deductions. . 791,260 825,110 415,285 196,595 222,521 349,478 Participants' rollover transfers. . -- 1,942 1,942 5,826 12,901 -- Employer's matching contributions . 16 -- -- -- -- -- ----------- ----------- ----------- ----------- ---------- ----------- Total contributions . . . . . . 791,276 827,052 417,227 202,421 235,422 349,478 ----------- ----------- ----------- ----------- ---------- ----------- Net unrealized and realized appreciation (depreciation) in fair value of investments . . . . . (96,167) (183,935) (186,697) 35,178 18,794 (65,559) ----------- ----------- ----------- ----------- ---------- ----------- Total additions. . . . . . . . . . . 716,834 846,357 330,254 351,044 405,797 986,198 ----------- ----------- ----------- ----------- ---------- ----------- DEDUCTIONS: Distributions to withdrawing participants (1,320,797) (1,444,338) (366,451) (295,896) (829,015) (184,040) Administrative expenses. . . . . . . . (2,776) (2,881) (898) (653) (1,276) (928) ----------- ----------- ----------- ----------- ---------- ----------- Total deductions . . . . . . . . . . (1,323,573) (1,447,219) (367,349) (296,549) (830,291) (184,968) ----------- ----------- ----------- ----------- ---------- ----------- TRANSFERS BETWEEN FUNDS - Net . . . . . . (10,114,576) (11,721,359) (5,318,895) (2,324,685) (4,159,745) 10,578,978 ----------- ----------- ----------- ----------- ---------- ----------- OTHER ACTIVITY. . . . . . . . . . . . . . 4,469 (16,252) (3,312) (7,521) (8,534) (36,234) ----------- ----------- ----------- ----------- ---------- ----------- Net additions (deductions) . . . . . (10,716,846) (12,338,473) (5,359,302) (2,277,711) (4,592,773) 11,343,974 ----------- ----------- ----------- ----------- ---------- ----------- NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR. . . . . . . . . . . . . . $ -- $ -- $ -- $ -- $ -- $11,343,974 =========== =========== =========== =========== ========== ===========
Vanguard IDS New Bond Index Vanguard Dimensions SSgA Small Total Institutional Y-Class Capitalization Institutional Index Other --------- -------------- ------------- ------- ------- NET ASSETS AVAILABLE, FOR BENEFITS, BEGINNING OF YEAR. . . . . . . . . . . $ -- $ -- $ -- $ -- $ 970,987 ----------- ----------- ----------- ----------- ---------- ADDITIONS: Investment Income- Interest and dividends. . . . . . . 731,648 61 48,588 104,222 40,051 ----------- ----------- ----------- ----------- ---------- Contributions: Participants' payroll deductions. . 361,003 4,675 91,350 207,044 -- Participants' rollover transfers. . -- -- -- -- -- Employer's matching contributions . -- -- -- -- -- ----------- ----------- ----------- ----------- ---------- Total contributions . . . . . . 361,003 4,675 91,350 207,044 -- ----------- ----------- ----------- ----------- ---------- Net unrealized and realized appreciation (depreciation) in fair value of investments . . . . . 1,968,869 9,433 1,811 1,378,902 -- ----------- ----------- ----------- ----------- ---------- Total additions. . . . . . . . . . . 3,061,520 14,169 141,749 1,690,168 40,051 ----------- ----------- ----------- ----------- ---------- DEDUCTIONS: Distributions to withdrawing participants (212,186) -- (10,529) (97,071) (65,976) Administrative expenses. . . . . . . . (944) (2) (250) (341) -- ----------- ----------- ----------- ----------- ---------- Total deductions . . . . . . . . . . (213,130) (2) (10,779) (97,412) (65,976) ----------- ----------- ----------- ----------- ---------- TRANSFERS BETWEEN FUNDS - Net . . . . . . 9,830,383 65,762 2,464,729 6,520,185 37,915 ----------- ----------- ----------- ----------- ---------- OTHER ACTIVITY. . . . . . . . . . . . . . (10,303) 154 (7,139) 2,491 295,007 ----------- ----------- ----------- ----------- ---------- Net additions (deductions) . . . . . 12,668,470 80,083 2,588,560 8,115,432 306,997 ----------- ----------- ----------- ----------- ---------- NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR. . . . . . . . . . . . . . $12,668,470 $ 80,083 $ 2,588,560 $8,115,432 $1,277,984 =========== =========== =========== =========== ========== See accompanying Notes to Financial Statements.
2
ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997 SUPPLEMENTAL INFORMATION ---------------------------------------------------------------------- FIDELITY MUTUAL FUNDS ----------------------------------------- ENSERCH EEX TXU Common Common Common Stock Stock Stock Equity- Total Fund Fund Fund Income Magellan ------- ------ ------ ------ -------- -------- NET ASSETS AVAILABLE, FOR BENEFITS, BEGINNING OF YEAR. . . . . . . . . . . $80,878,422 $41,781,064 $ 305,629 $ -- $3,405,103 $10,699,452 ----------- ----------- ----------- ----------- ---------- ----------- ADDITIONS: Investment Income- Interest and dividends. . . . . . . 1,731,124 166,243 -- 173,328 89,189 154,117 ----------- ----------- ----------- ----------- ---------- ----------- Contributions: Participants' payroll deductions. . 5,741,763 590,220 39,169 239,929 495,738 1,448,359 Participants' rollover transfers. . 121,890 716 -- 902 32,149 27,353 Employer's matching contributions . 2,026,724 249,865 29,278 519,919 86,017 319,625 ----------- ----------- ----------- ----------- ---------- ----------- Total contributions . . . . . . 7,890,377 840,801 68,447 760,750 613,904 1,795,337 ----------- ----------- ----------- ----------- ---------- ----------- Net unrealized and realized appreciation (depreciation) in fair value of investments . . . . . 6,471,288 (5,595,297) 2,406,566 2,399,420 1,095,841 2,594,281 ----------- ----------- ----------- ----------- ---------- ----------- Total additions. . . . . . . . . . . 16,092,789 (4,588,253) 2,475,013 3,333,498 1,798,934 4,543,735 ----------- ----------- ----------- ----------- ---------- ----------- DEDUCTIONS: Distributions to withdrawing participants (11,652,191) (1,334,528) (1,771,263) (1,193,163) (672,312) (1,494,685) Administrative expenses. . . . . . . . (263,759) (15,885) (3,053) (1,874) (1,018) (4,246) ----------- ----------- ----------- ----------- ---------- ----------- Total deductions . . . . . . . . . . (11,915,950) (1,350,413) (1,774,316) (1,195,037) (673,330) (1,498,931) ----------- ----------- ----------- ----------- ---------- ----------- TRANSFERS BETWEEN FUNDS - Net . . . . . . -- (35,810,774) 19,062,219 13,059,341 1,033,891 (424,126) ----------- ----------- ----------- ----------- ---------- ----------- PLAN CHANGES: New plan members . . . . . . . . . . . 637,019 -- -- -- 131,428 94,053 Distibution to EEX . . . . . . . . . . (12,394,936) -- (2,020,429) (1,048,867) (834,757) (2,672,786) ----------- ----------- ----------- ----------- ---------- ----------- Total. . . . . . . . . . . . . . . . (11,757,917) -- (2,020,429) (1,048,867) (703,329) (2,578,733) ----------- ----------- ----------- ----------- ---------- ----------- OTHER ACTIVITY. . . . . . . . . . . . . . (2,076) (31,624) (22,163) (5,361) 8,380 (24,551) ----------- ----------- ----------- ----------- ---------- ----------- Net additions (deductions) . . . . . (7,583,154) (41,781,064) 17,720,324 14,143,574 1,464,546 17,394 ----------- ----------- ----------- ----------- ---------- ----------- NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR. . . . . . . . . . . . . . $73,295,268 $ -- $18,025,953 $14,143,574 $4,869,649 $10,716,846 =========== =========== =========== =========== ========== ===========
Retirement
Spartan Government U.S. Equity U.S. Bond Money Market Purtitan Index Index Portfolio Other -------- ------- --------- ----------- ------- NET ASSETS AVAILABLE, FOR BENEFITS, BEGINNING OF YEAR. . . . . . . . . . . $12,066,082 $ 3,447,602 $ 2,458,157 $ 5,462,084 $1,253,249 ----------- ----------- ----------- ----------- ---------- ADDITIONS: Investment Income- Interest and dividends. . . . . . . 473,850 85,826 177,384 307,330 103,857 ----------- ----------- ----------- ----------- ---------- Contributions: Participants' payroll deductions. . 1,622,757 445,419 342,360 517,812 -- Participants' rollover transfers. . 23,191 29,360 5,286 2,933 -- Employer's matching contributions . 372,060 74,216 82,495 125,689 167,560 ----------- ----------- ----------- ----------- ---------- Total contributions . . . . . . 2,018,008 548,995 430,141 646,434 167,560 ----------- ----------- ----------- ----------- ---------- Net unrealized and realized appreciation (depreciation) in fair value of investments . . . . . 2,249,350 1,267,487 53,100 540 -- ----------- ----------- ----------- ----------- ---------- Total additions. . . . . . . . . . . 4,741,208 1,902,308 660,625 954,304 271,417 ----------- ----------- ----------- ----------- ---------- DEDUCTIONS: Distributions to withdrawing participants (1,755,551) (385,086) (403,264) (2,517,079) (125,260) Administrative expenses. . . . . . . . (4,494) (1,018) (1,099) (1,916) (229,156) ----------- ----------- ----------- ----------- ---------- Total deductions . . . . . . . . . . (1,760,045) (386,104) (404,363) (2,518,995) (354,416) ----------- ----------- ----------- ----------- ---------- TRANSFERS BETWEEN FUNDS - Net . . . . . . 368,116 1,215,005 38,353 1,498,078 (40,103) ----------- ----------- ----------- ----------- ---------- PLAN CHANGES: New plan members . . . . . . . . . . . 11,349 47,069 34,944 285,222 32,954 Distibution to EEX . . . . . . . . . . (3,071,102) (862,498) (517,632) (1,103,894) (262,971) ----------- ----------- ----------- ----------- ---------- Total. . . . . . . . . . . . . . . . (3,059,753) (815,429) (482,688) (818,672) (230,017) ----------- ----------- ----------- ----------- ---------- OTHER ACTIVITY. . . . . . . . . . . . . . (17,135) (4,080) 7,627 15,974 70,857 ----------- ----------- ----------- ----------- ---------- Net additions (deductions) . . . . . 272,391 1,911,700 (180,446) (869,311) (282,262) ----------- ----------- ----------- ----------- ---------- NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR. . . . . . . . . . . . . . $12,338,473 $ 5,359,302 $ 2,277,711 $4,592,773 $ 970,987 =========== =========== =========== =========== ========== See accompanying Notes to Financial Statements.
3 ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN - ------------------------------------------------------------------------------ NOTES TO FINANCIAL STATEMENTS - ------------------------------------------------------------------------------ 1. DESCRIPTION OF THE PLAN General - The ENSERCH Corporation Employee Stock Purchase and Savings ------- Plan ("the Plan"), is a participant-directed defined contribution combination employee stock ownership and profit sharing plan under Sections 401(a), 401(k), 401(m) and 4975(e)(7) of the Internal Revenue Code ("the Code"). The Plan is subject to the applicable provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). On June 14, 1999, ENSERCH Corporation's name was changed to TXU Gas Company; however, the Plan's name was not changed. In August 1997, ENSERCH Corporation ("ENSERCH" or "the Corporation") became a wholly-owned subsidiary of Texas Utilities Company, doing business as TXU Corp ("TXU"). The merger was immediately preceded by a distribution of Enserch Exploration, Inc. ("EEX") (a majority-owned publicly traded subsidiary) shares to holders of ENSERCH common stock. Under terms of the merger agreement, shares of the common stock of TXU were exchanged for all of the outstanding shares of the Corporation and company matching contributions were modified to be in the form of TXU stock. Pursuant to the distribution of EEX shares, approximately $12,395,000 of Plan assets were transferred to the EEX Corporation Employee Stock Purchase and Savings Plan. The following description is provided for general information only. Reference should be made to the Plan document for more complete information. The Plan was established by ENSERCH and its divisions and participating subsidiary companies to encourage and assist employees in establishing an individual savings and investment program. A committee appointed by the TXU Board of Directors is responsible for the general administration, management and operation of the Plan. Chase Bank ("the Trustee"), a federally chartered bank, serves as trustee and is custodian of the assets of the Plan. Participation by eligible employees is voluntary. All salaried employees of ENSERCH and its participating subsidiaries who were on the ENSERCH payroll for the last payroll period of 1997 were eligible to participate in the Plan, and those participating remain eligible while employed by an affiliate of TXU. Individuals employed by ENSERCH and its subsidiaries subsequent to the last payroll period of 1997 are eligible to participate in the Employees' Thrift Plan of the Texas Utilities Company System. Participants' Contributions - Under the Plan, a participant may invest --------------------------- pre-tax and/or after-tax dollars through payroll deductions each pay period in increments of one percent up to a maximum of 16 percent of base pay. The Omnibus Budget Reconciliation Act of 1993 placed an annual limitation of $160,000 in 1998 on the pay which can be used in computing benefits for participants under the Plan. The maximum contribution for certain highly compensated participants is subject to further reduction pursuant to limitations under the Internal Revenue Code. Eligible employees can roll over to the Plan distributions received from other qualified retirement plans. Individual Retirement Account ("IRA") distributions are not eligible for rollover into the Plan. 4 ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN - ------------------------------------------------------------------------------ NOTES TO FINANCIAL STATEMENTS - ------------------------------------------------------------------------------ Each participant is entitled to direct the allocation of his or her pretax, aftertax and rollover accounts among the common stock of TXU or other mutual fund investment options as offered. As of December 31, 1998 the mutual fund investment options included: the American AAdvantage International Institutional, Dreyfus-Certus Stable Value, Fidelity Equity-Income, Hotchkis & Wiley Balanced, IDS New Dimensions Y-Class, SSgA Small Capitalization, Vanguard Bond Index Total Institutional, and the Vanguard Institutional Index. A participant can change investment elections for future contributions and can transfer (or exchange) any existing mutual fund balances among the offered investment options at any time, in accordance with the Plan guidelines. Employer Matching Contributions ("company matching") - The maximum ------------------------------- participant contribution eligible for matching is 6% of the participant's eligible compensation. Company matching contributions as a percentage of participant contributions are at a rate of 40%, 50% or 60% depending on on length of service. Employees are 100% vested in the matching contributions. Company matching contributed to the Plan prior to the ENSERCH and TXU merger was invested at the participant's direction, in any of the Plan's investment options. Subsequent to the merger date, all Company matching contributions are in TXU common stock. Investment of Funds - All assets of the Plan are held by the Trustee for ------------------- the exclusive benefit of participants and their beneficiaries. Separate account records for each participant are maintained by the Trustee. The Trustee provides a summary of financial performance by investment fund directly to Plan participants. Unit Values - Participants do not have beneficial ownership in specific ----------- securities or other assets in the various funds other than Common Stock, but have an interest therein represented by units valued as of the close of each business day. Generally, contributions to and withdrawal payments from each fund are converted to units by dividing the amounts of such transactions by the unit value as last determined, and the appropriate account is charged or credited with the number of units properly attributable to the participant. Withdrawal from the Plan - Withdrawals from the Plan are governed by ------------------------ applicable IRS regulations and provisions of ERISA. Penalties may apply in certain instances. Employees may make full withdrawals from either their after-tax or company matching accounts at any time and for any reason. Employees may also make full or partial withdrawals from their rollover accounts at any time and for any reason. Employees may make withdrawals from pretax accounts after meeting certain qualifications as defined by the IRS based on certain hardship rules. A participant who terminates employment and has an account balance of more than $5,000 can retain the funds in the Plan or withdraw them at any time. Participants that terminate with balances equal to or less than $5,000 are required to receive a distribution after termination. To avoid taxation, the taxable portion of any withdrawal made upon termination can be rolled into an IRA or a qualified retirement plan sponsored by another employer. The IRS has established rules governing distributions from the Plan after the participant has attained 70 1/2 years of age. 5 ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN - ------------------------------------------------------------------------------ NOTES TO FINANCIAL STATEMENTS - ------------------------------------------------------------------------------ Unclaimed Terminated Participants' Accounts - The plan has a segregated ------------------------------------------- account of amounts payable to terminated participants of the former Tax Reduction Act Stock Ownership Plan ("TRASOP") whom the Plan administrators have been unable to locate for more than one year from the date of termination. Included in net assets available for benefits as of December 31, 1998, and 1997, were $982,396 and $1,431,021, respectively, of TRASOP unclaimed terminated participants' benefits. As of December 31, 1998 and 1997, there was $274,471 and $239,122 respectively, invested in the Chase Bank Short Term Investment Fund, representing unclaimed dividends payable to terminated participants of the TRASOP. The Plan remains contingently liable to terminated participants for unclaimed cash and shares. Federal Income Taxes -The Company has been advised by the IRS that the -------------------- Plan meets the requirements of Section 401(a) of the Code as to form; that the trust established thereunder is exempt from federal income taxes under Section 501(a) of the Code; and that employer contributions paid to the Trust under the Plan are allowable federal income tax deductions to the Corporation subject to the conditions and limitations of Section 404 of the Code. Based on the Code and regulations issued pursuant thereto: (a) Employer contributions under the Plan, and dividends, interest and other income from Trust assets are not taxable to the participant when received by the Trustee and credited to the participant's account. (b) Employee after-tax contributions are not deductible on the participant's federal income tax return. (c) Only pre-tax contributions reduce a participant's gross compensation as reported on Form W-2 and are not taxable to the participant when received by the Trustee and credited to the participant's account. (d) A total withdrawal generally results in taxable income to the participant equal to the gross distribution less any after-tax employee contribution. However, if the total withdrawal meets the lump sum distribution requirement of the Code, (i) any net unrealized appreciation in the value of distributable Common Stock from the time of distribution will be tax deferred; (ii) any additional appreciation in the value of Common Stock from the time of distribution to the time of stock sale or disposition will be treated as short-term or long-term capital gain depending on the period the participant holds such stock and (iii) the taxable amount may be eligible for the special forward averaging provisions of the Code. 6 ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN - ------------------------------------------------------------------------------ NOTES TO FINANCIAL STATEMENTS - ------------------------------------------------------------------------------ Termination of the Plan - It is the intention of the Corporation to ----------------------- continue the Plan indefinitely; however, the Corporation, by action of its Board of Directors, may amend, modify or suspend the Plan at any time, or from time to time, and may terminate the Plan at any time. In the event of termination of the Plan in whole or in part, each participant in the Plan shall receive a distribution of the entire balance in the participant's account. Participants are 100% vested in their accounts at all times. 2.SUMMARY OF ACCOUNTING POLICIES Basis of Accounting - The financial statements of the Plan are prepared ------------------- under the accrual method of accounting. Use of Estimates - The preparation of financial statements requires the ---------------- use of significant estimates and assumptions by management. Actual results could differ from those estimates. Investment Valuation and Income Recognition - The Plan's investments are ------------------------------------------- stated at fair value. Investments in common stock of TXU and EEX are valued at their quoted market value. Investments in mutual funds are valued at quoted net asset value of the respective funds reflecting the closing sales price of the underlying securities. Security transactions are recorded on the trade date. Expenses - All charges and expenses incurred in the administration of the -------- Plan and fees and expenses of the Trustee are paid by the Corporation. New Accounting Pronouncements -- In June 1998, the Financial Accounting ----------------------------- Standards Board issued Statement of Financial Accounting Standards Number 133 (SFAS 133) "Accounting for Derivative Instruments and Hedging Activities." This statement, which is required to be adopted for annual periods beginning after June 15, 2000, establishes standards for recognition and measurement of derivative and hedging activities. The Plan has not yet determined the financial statement impact, if any, of SFAS 133. 7
ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN - ------------------------------------------------------------------------------ NOTES TO FINANCIAL STATEMENTS - ------------------------------------------------------------------------------ 3.MUTUAL FUND VALUATIONS AND COMMON STOCK HOLDINGS Units in each mutual fund at December 31, 1998 and 1997 and net asset value per unit are presented below. 1998 1997 --------------------- -------------------- Net Asset Net Asset Number Value per Number Value per of units Unit of Units Unit -------- ---------- -------- --------- Mutual Funds: American AAdvantage International Institutional 3,657.417 $17.05 -- -- Dreyfus-Certus Stable Value 4,040,768.327 1.00 -- -- Fidelity Equity-Income 100,211.785 55.55 92,914.495 $52.41 Hotchkis & Wiley Balanced 608,582.329 18.64 -- -- IDS New Dimensions Y-Class 439,191.247 28.84 -- -- SSgA Small Capitalization 4,125.838 19.41 -- -- Vanguard Bond Index Total Institutional 252,050.606 10.27 -- -- Vanguard Institutional Index 71,913.466 112.85 -- -- Fidelity Magellan -- -- 112,489.196 95.27 Fidelity Puritan -- -- 636,660.101 19.38 Fidelity Spartan U.S. Equity Index -- -- 153,210.458 34.98 Fidelity U. S. Bond Index -- -- 211,094.618 10.79 Fidelity Retirement Government Money Market Portfolio -- -- 4,592,773.040 1.00 Shares of common stock of TXU and EEX at December 31, 1998 and 1997 and market value per share are presented below: 1998 1997 ----------------------- ---------------------- Market Market Number of Value per Number of Value per Shares Share Shares Share --------- --------- --------- --------- TXU Common Stock 382,794 $46.69 340,809 $41.50 EEX Common Stock (a) 526,662 7.00 663,025 27.18 - ------------------- (a) Number of shares and market value per share reflect a 1 for 3 reverse stock split which occurred during December 1998. The number of shares and market value per share at December 31, 1997 without giving effect to the reverse stock split were 1,989,075 and $9.06, respectively. 4.PARTICIPANT LOANS Participants may borrow up to 50% of the market value of their pre-tax employee contribution account and any rollover account; however, the loan cannot exceed $50,000 less the maximum outstanding loan balance in the previous one year period. The interest rate on the loan is equal to the prime interest rate of the Trustee that is in effect on the date the loan is made. The interest rate on loans outstanding at the end of the year ranged from 7.75% to 8.5%. Loans are funded by withdrawals from the individual's investment accounts. The maximum term of a loan cannot exceed 5 years or, if earlier, severance from service, except mortgage loans may have a maximum term of 15 years or, if earlier, severance from service. A participant may have a maximum of two concurrent loans. Loans may be repaid, in full, at any time. 8 ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN - SUPPLEMENTAL - --------------------------------------------------------------------------- SCHEDULES - --------- ITEM 27 a -SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES, DECEMBER 31, 1998 - ----------------------------------------------------------------------------- (Dollar amounts rounded to nearest whole dollar) DESCRIPTION OR FAIR IDENTITY OF ISSUER INVESTMENT COST VALUE - ------------------ ---------- ---- ----- EEX COMMON STOCK FUND 526,662 shares, par $12,651,871 $3,686,634 value of $1.00 per share TXU COMMON STOCK FUND* 382,794 shares, 14,045,724 17,871,713 no par value MUTUAL FUNDS: AMERICAN AADVANTAGE INTERNATIONAL INSTITUTIONAL 3,657 units 61,373 62,359 DREYFUS-CERTUS STABLE VALUE 4,040,768 units 4,040,768 4,040,769 FIDELITY EQUITY-INCOME 100,212 units 4,765,227 5,566,765 HOTCHKIS & WILEY BALANCED 608,582 units 11,430,761 11,343,974 IDS NEW DIMENSIONS Y-CLASS 439,191 units 10,751,587 12,668,470 SSgA SMALL CAPITALIZATION 4,126 units 73,452 80,083 VANGUARD BOND INDEX TOTAL INSTITUTIONAL 252,051 units 2,587,781 2,588,560 VANGUARD INSTITUTIONAL INDEX 71,913 units 6,766,594 8,115,432 LOANS TO PARTICIPANTS * Interest Rate - Ranges from 7.75% - 8.5% (Based on Prime on date of loan) Maturity Dates - Various, from January 1999 to May 2002 Term of Loans - Not less than one year or more than five years, except mortgage loans may not exceed 15 years 988,776 units 988,776 988,776 ------------ ----------- TOTAL $68,163,914 $67,013,535 =========== =========== * Party-in-Interest. 9
ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN - SUPPLEMENTAL - --------------------------------------------------------------------------- SCHEDULES - --------- ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS, FOR THE YEAR ENDED - ------------------------------------------------------------------ DECEMBER 31, 1998 - ----------------- (Dollar amounts rounded to nearest whole dollar) PURCHASES -------------------- IDENTITY OF NUMBER OF PARTY INVOLVED DESCRIPTION OF ASSET TRANSACTIONS AMOUNT - --------------- -------------------- ------------ ------ DREYFUS-CERTUS MUTUAL DREYFUS-CERTUS FUNDS STABLE FUND 1 $4,203,753 HOTCHKIS & WILEY HOTCHKIS & WILEY 1 $11,247,042 MUTUAL FUNDS BALANCED FUND IDS MUTUAL FUNDSIDS NEW DIMENSIONS Y-CLASS 1 $10,108,434 VANGUARD MUTUAL FUNDS VANGUARD INSTITUTIONAL INDEX FUND 1 $5,931,080 CHASE BANK TXU CORP. COMMON STOCK 192 $4,292,665 DREYFUS-CERTUS MUTUAL DREYFUS-CERTUS FUNDS STABLE FUND 37 $4,899,677 HOTCHKIS & WILEY HOTCHKIS & WILEY MUTUAL FUNDS BALANCED FUND 29 $12,395,455 IDS MUTUAL FUNDS IDS NEW DIMENSIONS Y-CLASS 39 $11,529,922 VANGUARD MUTUAL VANGUARD INSTITUTIONAL FUNDS INDEX 46 $7,326,211 SALES ---------------------------------------------------------------- CURRENT VALUE OF ASSET ON REALIZED IDENTITY OF NUMBER OF SELLING COST TRANSACTION GAIN PARTY INVOLVED DESCRIPTION OF ASSET TRANSACTIONS PRICE OF ASSET DATE (LOSS) - ---------------- -------------------- ------------ -------- -------- ------------ ------- FIDELITY MUTUAL FUNDS FIDELITY MAGELLAN FUND 1 $10,108,434 $10,651,686 $10,108,434 $(543,252) FIDELITY MUTUAL FUNDS FIDELITY MAGELLAN FUND 98 $12,028,681 $12,409,453 $12,028,681 $(380,772) FIDELITY MUTUAL FUNDS FIDELITY PURITAN FUND 108 $13,460,549 $13,644,485 $13,460,549 $(183,936) FIDELITY MUTUAL FUNDS FIDELITY RETIREMENT GOVERNMENT MONEY MARKET PORTFOLIO 114 $6,566,599 $6,566,599 $6,566,599 $ -- FIDELITY MUTUAL FUNDS FIDELITY SPARTAN US EQUITY INDEX FUND 72 $6,686,717 $6,873,411 $6,686,717 $(186,694)
10 INDEPENDENT AUDITORS' REPORT Employees' Thrift Plan Committee Employees' Thrift Plan of the Texas Utilities Company System: We have audited the accompanying statements of net assets available for benefits of the ENSERCH Corporation Employee Stock Purchase and Savings Plan ("the Plan") as of December 31, 1998 and 1997, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1998 and 1997, and the changes in net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information by fund is presented for the purpose of additional analysis of the basic financial statements rather than to present information regarding the net assets available for benefits and changes in net assets available for benefits of the individual funds, and is not a required part of the basic financial statements. The accompanying supplemental schedules of (1) assets held for investment purposes at December 31, 1998 and (2) reportable transactions for the year ended December 31, 1998 are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental information by fund and supplemental schedules are the responsibility of the Plan's management. Such supplemental information by fund and supplemental schedules have been subjected to the auditing procedures applied in our audit of the basic 1998 financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. DELOITTE & TOUCHE LLP Dallas, Texas June 25, 1999 11 ------------ SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Employees' Thrift Plan Committee has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. ENSERCH CORPORATION EMPLOYEE STOCK PURCHASE AND SAVINGS PLAN By /s/ Robert L. Turpin -------------------------- Robert L. Turpin, Assistant Secretary Employees' Thrift Plan Committee June 29, 1999 12 EX-23 2 EXHIBIT 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 333-32835 of Texas Utilities Company on Form S-8 of our report dated June 25, 1999, appearing in this Annual Report on Form 11-K of the ENSERCH Corporation Employee Stock Purchase and Savings Plan for the year ended December 31, 1998. DELOITTE & TOUCHE LLP Dallas, Texas June 28, 1999 13 -----END PRIVACY-ENHANCED MESSAGE-----